Freddie Mac 2005 Annual Report Download - page 68

Table 32 Ì SpeciÑed Contractual Obligations by Year (at December 31, 2005)
Total 2006 2007 2008 2009 2010 Thereafter
(in millions)
Long-term debt securities(1) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $585,804 $ 95,596 $106,696 $72,125 $47,348 $52,249 $211,790
Short-term debt securities(1) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 194,578 194,578 ÌÌÌÌ Ì
Other liabilities reÖected on our consolidated balance sheets:
Due to Participation CertiÑcate investors ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10,607 10,607 ÌÌÌÌ Ì
Accrued interest payable(2) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7,611 7,611 ÌÌÌÌ Ì
Other contractual liabilities(3)(4) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,931 2,179 1,006 425 126 63 132
Purchase obligations:
Purchase commitments(5) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 13,095 13,095 ÌÌÌÌ Ì
Other purchase obligations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 408 209 91 47 20 14 27
Operating lease obligations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 101 17 14 11 10 10 39
Total speciÑed contractual obligations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $816,135 $323,892 $107,807 $72,608 $47,504 $52,336 $211,988
(1) Represents par value. Callable debt is included in this table at its contractual maturity. For additional information about our debt securities, see
""NOTE 8: DEBT SECURITIES AND SUBORDINATED BORROWINGS'' to our consolidated Ñnancial statements.
(2) Accrued interest payable primarily represents the accrual of interest on our short-term and long-term debt securities, as well as the accrual of periodic
cash settlements of all derivatives, netted by counterparty.
(3) Other contractual liabilities primarily represent future cash payments due under our contractual obligations to make delayed equity contributions to
low-income housing tax credit partnerships that are unconditional and legally binding.
(4) Accrued obligations related to our deÑned beneÑt plans, deÑned contribution plans and executive deferred compensation plan are included in the Total
and 2006 columns. However, the timing of payments due under these obligations is uncertain. See ""NOTE 15: EMPLOYEE BENEFITS'' to our
consolidated Ñnancial statements for additional information.
(5) Purchase commitments represent our obligations to purchase mortgage loans and mortgage-related securities from third parties. The majority of
purchase commitments included in this caption are accounted for as derivatives in accordance with SFAS 133.
Capital Resources
Our objective in managing capital is to preserve our safety and soundness, while maintaining suÇcient capital to take
advantage of new business opportunities and support our mission at attractive long-term returns.
Capital Transactions
During 2005 and 2004, we added approximately $1.0 billion and $2.0 billion, respectively, to Core capital primarily from
Net income of $2.1 billion and $2.9 billion, respectively, oÅset by the payment of common and preferred stock dividends
totalling $1.3 billion and $1.0 billion, respectively. See ""NOTE 10: REGULATORY CAPITAL'' to our consolidated
Ñnancial statements for additional information.
Our board of directors approved a dividend per common share of $0.47 for the fourth quarter of 2005, an increase of
34 percent over the previous quarterly dividends in 2005. The dividend per common share was $0.35 for the Ñrst three
quarters in 2005, an increase of 17 percent over the $0.30 per common share quarterly dividend paid each quarter
during 2004. We paid a quarterly dividend per common share of $0.26 in 2003. Our board of directors will determine the
amount of dividends, if any, declared and paid in any quarter after considering our capital position and earnings and growth
prospects, among other factors.
In addition, as described in ""MARKET FOR THE COMPANY'S COMMON EQUITY, RELATED STOCK-
HOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES,'' on October 5, 2005, our board of
directors authorized us to repurchase up to $2.0 billion of outstanding shares of common stock and issue up to $2.0 billion of
non-cumulative, perpetual preferred stock. With the release of our 2005 Ñnancial results in May, we moved forward with
the repurchase of common stock and we expect to issue the authorized preferred stock depending on market conditions and
other factors.
Subject to being consistently well capitalized relative to our regulatory requirements and risks and having suÇcient
capital to support our business and mission, we will consider returning excess capital to our stockholders in future periods.
The amount of capital available to distribute to our stockholders is aÅected primarily by our capital position and earnings
and growth prospects, among other factors. In addition, as long as OFHEO's capital monitoring framework remains in
place, certain capital transactions, including the repurchase of any shares of common stock, require prior written OFHEO
approval.
For a summary of our preferred stock outstanding at December 31, 2005 and information on redemption dates for our
preferred stock issuances, see ""NOTE 9: STOCKHOLDERS' EQUITY'' to our consolidated Ñnancial statements.
We periodically reissue treasury stock to employees and non-employee directors as part of our stock-based compensa-
tion plans. See ""NOTE 11: STOCK-BASED COMPENSATION'' to our consolidated Ñnancial statements for a
description of these plans.
52 Freddie Mac